Jon Huntsman's False Reality

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Jon Huntsman Jr.: Courtesy - Wikipedia

Just listened to Presidential hopeful Jon Hunstman, former 16th Governor of Utah, speak on TV. The thrust of his pitch is that our economy is failing to grow for lack of capital (FALSE) and the way to ramp up the economy is to make capital investments from overseas inviting (also FALSE). Jon Hunstman is hitching his aspirations to the old 'trickle down economics' that failed our nation during the Bush years. He probably believes what he is saying, but, here is why you shouldn't.

American corporations are sitting on trillions of capital they don't
know what to do with here, except to invest it overseas, since, there is this slow economic growth
pace here in America (slow consumer demand growth). Our corporations are putting their capital to work overseas in India and China and other countries where consumer demand is far more robus. But, there are limits there, as well.

Our domestic economy corporations could be handed
double their current free capital, and they still wouldn't invest in
future economic growth in America, because the simple economic fact is,
business expansion requires the consumer demand to support it, and our consumer
demand doesn't warrant business expansion, overall. Consumers, after a couple decades of living beyond their means on credit, are now buying down credit card debt and retail loans. The money they are using to buy down debt and increase savings, is not being spent at retailers. That is the reason for our slow but steady economic growth since the early months in 2009. There is no government way to speed this process up.

Huntsman, therefore, is arguing a case that doesn't exist in reality. He is arguing that our economy is not picking up faster because businesses don't have capital. His case is that consumer demand is outstripping business capital to grow to meet that demand, That reality hasn't existed since the 1980's and early 1990's. But the policies that would follow from his erroneous understanding of our real economy, would be to lower corporate and wealthy individual's taxes, even more, provide business more tax payer dollar subsidies, and cut government benefits to American workers and poor in order to pay for those tax cuts and business subsidies.

Huntsman also said, regarding energy, that America has the oil it needs, the coal it needs, the natural gas it needs, and that it is crying shame America is importing 60% of its oil. Again, Hunstman lacks understanding of the real world. First, one must ask, what does America do when it depletes its oil, assuming we could (and we can't) tap all our oil reserves in the next 10 or 20 years? Would that not make America 100% dependent upon foreign oil, instead of 60%?

Second, Huntsman completely fails to appreciate that the oil companies greatest profit relies upon limited oil exploitation. If oil companies began drilling on the thousands of currently untapped oil leases, they would produce a glut of oil, driving the price of oil down, and hence reducing their profit margin per barrel of oil. Hunstman is running on paying back his oil company supporters by offering the public what the oil companies want the public to believe, that our future rests on fossil fuels. Even if Huntsman won the presidency and gave oil companies everything they want, the oil companies would continue to create artificial scarcity to both ensure the highest profit per barrel of oil, and prolong those highest profits per barrel for decades to come by not drilling on their oil leases.

Huntsman is running on an "I wish this were true" fantasy view of world and how it operates. If he can convince voters that his view of the world is true, both he and the fossil fuel industry is caddy's for, will get everything they want, wealth, power, and fame. But, what will regular working Americans get? More of what came out of the GW Bush decade: record corporate profits while working Americans become less secure and less wealthy, and with far fewer benefits from their tax dollars which will be forked over to the corporations and wealthiest in America. Those who like John Huntsman will have to forget reality to vote for him, just like Huntsman does.

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This page contains a single entry by David R. Remer published on May 22, 2011 8:01 PM.

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